Depositor protection for clients: banks and securities dealers

Clients at FINMA-authorised banks and securities dealers are covered by enhanced deposit protection for the first CHF 100,000 in the event of bankruptcy proceedings. A three-tiered system is designed to ensure that depositors do not suffer any losses.

If the bankrupt institution has sufficient liquid assets, deposits of up to CHF 100,000 per client (secured deposits) will be paid out immediately at Swiss and foreign branches, irrespective of the ordinary schedule of claims.

Advance payments for secured deposits

If it is not possible to pay out secured deposits in full from available liquid funds, advance payments will be made in respect of client deposits held at Swiss branches (secured deposits) by the depositor protection scheme.

Bankruptcy privilege

If a bank or securities dealer is declared bankrupt, deposits up to a maximum of CHF 100,000 per client are secured to provide extra protection. Their deposits come under the second creditor class and, as such, are paid out before the claims of third-class creditors. This applies to all deposits, including those made at foreign branches.

Bank foundations and vested benefits foundations

In addition to ordinary bank deposits, deposits made at bank foundations and vested benefits foundations are secured up to CHF 100,000 in the event of bankruptcy. However, they do not qualify for immediate payment from available liquid funds, nor are they covered by the depositor protection scheme for secured deposits.

Non-secured deposits

Deposits that are not secured, for example funds in excess of CHF 100,000 per client, do not qualify for any special protection and may where possible be recovered through bankruptcy proceeding as liquidation dividends.

Custody accounts excluded

Unlike deposits, custody account assets (e.g. shares and fund units) belong to the client. By law, they are segregated entirely from the estate during the bankruptcy proceedings and returned to the client.